Table of Contents
What are COVID-19 Federal assistance and the options available?
This document is intended to let more people know about this assistance scheme and provide a summary of some of the federal government’s answers to COVID-19. This is not intended to be a loan counseling service. To guarantee compliance and eligibility, please review the specifics of these federal and state programs. Please check this link for the original source for more accurate details:
COVID-19 Response with CCDBG FundingCongress appropriated $10 billion in additional CCDBG funding in December to assist states, territories, and tribes in addressing the many child care problems caused by the present public health crisis.
States have considerable discretion over how they utilize COVID-19 emergency funds. For example, funds can be used to: • Cover COVID-related expenses for child care providers, regardless of whether they serve children receiving subsidies; • Care for the children of essential workers; • Costs associated with program closure and reopening; • Costs associated with operating at reduced enrollment;
An unofficial estimate of state and tribal CCDBG allocations may be found here. We anticipate that the Office of Child Care will issue formal estimates and advice in the near future.
Check the OCC website often for advice and updates.
Federal Paid Sick Leave and the FFCRA Tax Credit
The obligation under the 2020 Family First Coronavirus Response Act (FFCRA) that companies offer paid sick leave to workers for COVID-19-related causes expired on December 31, 2020. However, the FFCRA company tax credit has been extended until September 30, 2021 to reimburse the cost of benefits given to workers during that time period for companies who choose to pay for these benefits.
Paycheck Protection Program (PPP)
• For small companies, organizations, self-employed people, and sole proprietors during COVID-19.
• Loan amount is 2.5 times monthly payroll for first-time beneficiaries and $2 million for second-time users • Loan is completely forgiven provided spending fulfills program criteria, including at least 60% on payroll • Apply via an approved bank or lender
Unemployment Insurance (UI)
• Additional qualifying criteria for COVID-19
• Benefits expansion
• New program for employees who are usually qualified for unemployment compensation
• Additional federal supplements
Employee Retention Credit (ERC)
Employers can claim a credit against 70% of qualified wages paid January 1, 2021 – June 30, 2021 (up to a $10,000 wage cap) if they were forced to close or quarantine their business as a result of a government order or experienced forced closures or quarantines and saw a more than 20% drop in gross receipts in a quarter compared to 2019.
• PPP loan borrowers in 2020 and 2021 may continue to claim an ERC as long as the forgiven PPP loan does not also cover the earnings claimed for ERC.
Economic Injury Disaster Loans (EIDL)
For small businesses, nonprofits and sole proprietors who experience loss in revenue because of COVID-19
• Must have suffered at least a 30% drop in income during any quarter of 2020 and operate in a low-income community that meets specific poverty levels
• The first $10,000, called an “EIDL advance, is like a grant that does not have to be repaid but only prior recipients who received less than $10,000 or prior applicants who were denied because of lack of program funds are eligible for the advance right now
• Apply online yourself with the SBA
What You Should Know About the Paycheck Protection Program
Congress authorized funding for a new Paycheck Protection Program (PPP) in December 2020 to assist small companies during the COVID-19 epidemic. The new PPP is more adaptable than the original, allowing previous PPP loan borrowers to apply for a second loan under specific circumstances.
Loans under the First Draw are available to participants who have never received a PPP loan before. Loans from the Second Draw are available to participants who have previously received a PPP loan.
Eligibility requirements and regulations vary significantly. The majority of nonprofit and for-profit child care providers qualify.
Additionally, self-employed family child care providers may be qualified.
CCR&Rs are qualified if they are a legal entity unto themselves.
• 501(c)(3) charitable organizations and small companies with less than 500 workers are qualified “businesses.”
• Nonprofit organizations and companies with more than 500 workers that satisfy the SBA industry size requirement
• Individuals who are self-employed, single proprietors, or independent contractors
Additional Eligibility Requirements for Second Draw Loans: • The business’s gross sales must have decreased by at least 25% in the first quarter of 2020 compared to the same quarter in 2019. • The business must have exhausted the first PPP loan by the date of the second loan’s distribution.
• The maximum size of a company is 300 rather than 500 workers.
Loans are not required to be repaid if, after 24 weeks, all employees are retained on payroll, payroll costs account for at least 60% of the loan, and the remainder is properly spent on expenses such as rent, mortgage interest, utilities, covered operations expenses (such as child care management system software), covered supplier costs (such as goods and perishable goods required for operation), and covered supplier costs (such as goods and perishable goods required for operation).
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Consult an official SBA source for critical details: The Small Business Association’s website on PPP.
• If the program does not run out of funds by May 31, 2021, loan applications will be considered.
• There may not be enough funding in the program to accommodate all applicants.
• There is no need for a personal guarantee or collateral.
• No application fee is required.
• Maximum loan amount: 2.5 times monthly salary, or $10 million in the case of First Draw loans, and $2 million in the case of Second Draw loans.
• The loan may be used to cover the following costs: payroll costs, including salary (up to $100,000 per year), wages, group health insurance, retirement contributions, paid sick/medical leave, rent, leases, utilities, mortgage interest payments, covered operations expenditures, covered supplier costs, and covered worker protections.
• If you utilize the loan in a manner that prevents it from being completely forgiven, payments will be delayed for six months, interest will be charged at 1%, and the loan will mature after five years.
Economic Inconvenience Disaster Loans: What You Need to Know
Congress approved a new Economic Injury Disaster Loans (EIDL) program in December 2020 for small companies and non-profits in low-income areas who have experienced revenue loss as a result of COVID-19. No repayment is required up to a maximum of $10,000.
• Eligible candidates may qualify for up to a cash advance, which is not returned and may be accessible even if the loan application is denied. This is referred to as an EIDL “advance.”
• At the moment, EIDL advance payments are offered only to previous EIDL beneficiaries who received less than $10,000 or to past applicants who did not get an advance due to the program’s financial constraints.
• Advance and loan money must be used for sick leave, payroll, additional expenses, rent or mortgage payments, or other commitments that cannot be fulfilled as a result of revenue losses due to COVID-19.
• You qualify if you are a small business or nonprofit organization with fewer than 500 employees, including sole proprietorships, independent contractors, cooperatives, and employee-owned businesses; and 800-424-2246 | learnmore@usa.childcareaware.org | childcareaware.org | 1515 N. Courthouse Rd., 3rd Floor Arlington, VA
• operate in a low-income neighborhood, defined as a region with a poverty rate more than 20% or a state median income less than 80%; and • experienced a minimum 30% loss in income as a result of COVID 19 when comparing one quarter in 2020 to the same quarter in 2019.
• EIDLs have a 3.75 percent interest rate for small companies and a 2.75 percent interest rate for charities. • You may have both a PPP loan and an EIDL as long as they are not utilized for the same expenditures. The EIDL is more likely to be approved faster than a PPP loan. The application procedure is conducted entirely online with the SBA. Complete information, including the application, are available here.
Assistance with Unemployment
Congress extended several COVID-19-related jobless aid programs in December 2020 until March 14, 2021, with payments phasing down on April 5, 2021. This contains supplements, extensions, and programs for non-UI employees. Benefits are calculated on the basis of prior wages. To qualify, you must self-certify that you are able and available to work and that you are jobless, partly employed, or unable or unable to work as a result of a COVID-19-related circumstance. State-specific regulations differ.
Through September 6, 2021, Current Unemployment Assistance Programs:
• Pandemic Unemployment Assistance (PUA) – With a new 50-week limit, this program offers benefits to self-employed, part-time, and other kinds of employees who are not normally eligible for unemployment insurance.
• Pandemic Emergency Unemployment Compensation (PEUC) – This program provides an extra 11 weeks of unemployment benefit.
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Significant Resources Regarding Unemployment Insurance Programs
To be eligible for unemployment benefits, you must submit a claim with the state’s unemployment insurance program in which you worked. Claimants may submit claims in person, via telephone, or online, depending on the state.
• Contact your state’s unemployment insurance program immediately upon becoming jobless. When you submit a claim, you will be required to provide specific information, such as your previous employer’s address and dates of work. Avoid delays by providing accurate and full information.
• You may also begin here with the Department of Labor’s Unemployment Benefits Finder information site for additional information on eligibility and how to apply.
• To learn more about the number of weeks of unemployment compensation available in your state, see this chart.
States will automatically apply the additional $300/week federal benefit (FPUC) if you are receiving UI or PUA.
Credit for Employee Retention
Congress amended the Employee Retention Credit (ERC) for qualifying salaries received between January 1, 2021 and June 30, 2021 in December 2020. The ERC is intended to assist companies in retaining workers regardless of whether their operations are impacted by COVID-19. The proposed modifications broaden the loan pool, improve its flexibility, and make it more accessible to a broader range of companies.
Businesses and non-profit organizations with less than 500 workers are eligible if they meet the following criteria during the first two quarters of 2021:
• A company was compelled to close or curtail its activities entirely or partly as a result of a government order; or • Businesses had a greater than 20% decline in gross revenues in the quarter compared to the same quarter in 2019 as a result of forced closures or quarantines.
• The credit is now worth 70% of qualifying earnings, which also includes the cost of continuing to offer health benefits.
• The credit limit has been raised to $10,000 per employee each quarter (at the 70% rate, this equates to about $7,000 per employee per quarter).
• Payments in advance will be permitted. Keep an eye out for IRS advice and application forms in the near future.
• Employers may claim an ERC even if they got a PPP loan in 2020 or 2021, as long as they do not claim the credit for salaries covered by the loan.
Detailed information is accessible here. The IRS is likely to provide new guidelines in the near future. Consult this page.
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Paid Leave under the FFCRA and the FFCRA Tax Credit
Businesses are no longer obliged to pay federal benefits to workers who take sick leave due to COVID-19 as of January 1, 2021. However, the Family First Coronavirus Response Act (FFCRA) tax incentives for companies that voluntarily offer sick leave due to COVID-19 have been extended until September 30, 2021. Notably, Congressional action has no effect on any existing state or municipal paid leave legislation.
Significant facts:
• The tax credit is available to businesses and non-profit organizations with less than 500 workers.
• All eligibility requirements for the tax credit remain the same in 2021 as they were in 2020.
• Qualifying grounds for covering paid leave include the following: the employee is unable to work due to a federal, state, or municipal quarantine or isolation order; or the employee has been admonished.
